Miramar posts loss despite improved mining

The Con and Giant mines, operated by Miramar Mining (MAE-T), exceeded expectations during the last quarter of 2000, allowing the company to generate positive cash flow from operations despite low gold prices.

The mines, situated near Yellowknife, N.W.T., produced 35,678 oz. gold at a cash cost of US$242 per oz. in the fourth quarter, and 121,874 oz. at US$264 per oz. for the entire year. At Con, dilution was lower and production grades higher in key stopes.

Con delivered 52,041 tons grading 0.48 oz. gold per ton during the 3-month period, compared with a planned 62,276 tons grading 0.34 oz. Giant also exceeded expectations, by delivering 18,734 tons grading 0.45 oz. gold for processing, compared with a planned 20,280 tons of 0.35 oz. gold.

Positive cash flow from operations reversed the previous year’s operating losses, but Miramar remained in the red both for the fourth quarter and the full year. The company posted a loss of $1.2 million (or 2 per share) for the quarter, compared with a loss of $2 million (4 per share) for the corresponding period in 1999.

The consolidated net loss for the year rang in at $43.4 million (76 per share), which includes several hefty writedowns on exploration projects held by subsidiary Northern Orion Explorations (NNO-T). Earlier this year, Miramar announced plans to reduce its equity position in Northern Orion in order to focus on its gold mines and exploration projects in northern Canada.

This year, Miramar expects to produce 125,000 oz. gold at a cash cost of US$260 per oz. from its Yellowknife mines. Miramar brought the Con mine back into production in the summer of 1999 and acquired the Giant mine later that year after Royal Oak Mines filed for bankruptcy.

Meanwhile, Miramar and partner Hope Bay Gold (HGC-T) are exploring their jointly owned Hope Bay gold project in Nunavut. Several weeks ago, the partners discovered a potential new gold deposit, dubbed Naartok. Recent drilling returned a 24-ft. true width averaging 0.85 oz. gold per ton from the new discovery, which was found during this year’s $10-million work program aimed at boosting resources at Hope Bay.

So far, the partners have outlined 1.3 million oz. gold of near-surface, high-grade, measured and indicated resources at the Boston and Doris deposits, plus a further 579,000 oz. at Doris in the inferred category. The Boston and Madrid deposits also host additional lower-grade resources.